Yahoo! Reports First Quarter 2007 Financial Results

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Yahoo! Reports First Quarter 2007 Financial Results

FOR IMMEDIATE RELEASE
Yahoo! Reports First Quarter 2007 Financial Results
Revenues - $1,672 Million
Operating Income - $169 Million
Operating Income Before Depreciation, Amortization and Stock-Based
Compensation Expense - $460 Million

**SUNNYVALE, Calif. ? April 17, 2007 - ** Yahoo! Inc. (Nasdaq: YHOO) today reported results for the first
quarter ended March 31, 2007.
?We continued to make good progress against the goals we outlined for the company last year and as a
result, delivered a solid financial performance for the first quarter,? said Terry Semel, chairman and CEO of
Yahoo!. ?Yahoo! remains committed to delivering both increased value for advertisers and the highest
quality content to the majority of the world?s Internet population. With this powerful combination, we believe
that Yahoo! is well positioned to capture the major growth opportunities we see ahead for the future.?

First Quarter 2007 Financial Results
? Revenues were $1,672 million for the first quarter of 2007, a 7 percent increase compared to $1,567
million for the same period of 2006.
? Marketing services revenue was $1,469 million for the first quarter of 2007, a 6 percent increase
compared to $1,381 million for the same period of 2006.
? Fees revenue was $203 million for the first quarter of 2007, a 9 percent increase compared to $186
million for the same period of 2006.
? Revenues excluding traffic acquisition costs (?TAC?) were $1,183 million for the first quarter of 2007, a 9
percent increase compared to $1,088 million for the same period of 2006.
? Gross profit for the first quarter of 2007 was $958 million, a 5 percent increase compared to $909 million
for the same period of 2006.
? Operating income for the first quarter of 2007 was $169 million, a 16 percent decrease compared to
$201 million for the same period of 2006.
? Operating income before depreciation, amortization and stock-based compensation expense for the first
quarter of 2007 was $460 million, a 6 percent increase compared to $435 million for the same period of
2006.
? Cash flow from operating activities for the first quarter of 2007 was $441 million, a 15 percent increase
compared to $385 million for the same period of 2006.
? Free cash flow for the first quarter of 2007 was $369 million, an 8 percent increase compared to $343
million for the same period of 2006.
? Net income for the first quarter of 2007 was $142 million or $0.10 per diluted share compared to $160
million or $0.11 per diluted share for the same period of 2006.
? Non-GAAP net income for the first quarter of 2007 was $234 million or $0.17 per diluted share,
compared to non-GAAP net income of $233 million or $0.16 per diluted share for the same period of
2006.
? The provision for income taxes for the first quarter of 2007 was $92 million and yielded an effective tax
rate of 45 percent. The provision for income taxes for the first quarter of 2006 was $103 million and
yielded an effective tax rate of 43 percent.
? Explanations of the Company?s non-GAAP financial measures and the related reconciliations to the
GAAP financial measures the Company considers most comparable are included in the accompanying
?Note to Unaudited Condensed Consolidated Statements of Income,? ?Reconciliations to Unaudited
Condensed Consolidated Statements of Income,? and ?Reconciliation of GAAP Net Income and GAAP
Net Income Per Share to Non-GAAP Net Income and Non-GAAP Net Income Per Share.?
?Our first quarter financial results reflect solid execution against our plan. We maintained strong profitability
and cash flow, while remaining focused on building innovative products and services for our large and
growing base of users, advertisers and publishers,? said Susan Decker, chief financial officer, Yahoo!. ?As
we look ahead, we are very excited about the transformational changes taking place on the Internet, creating
great opportunities for both users and marketers, and we are confident that Yahoo! has the right combination
of assets to help lead this evolution.?

Segment Financial Results
? United States segment revenues for the first quarter of 2007 were $1,101 million compared to $1,097
million for the same period of 2006.
? International segment revenues for the first quarter of 2007 were $571 million, a 22 percent increase
compared to $470 million for the same period of 2006.
? United States segment operating income before depreciation, amortization and stock-based compensation
expense for the first quarter of 2007 was $342 million, a 2 percent increase compared to $335 million for
the same period of 2006.
? International segment operating income before depreciation, amortization and stock-based compensation
expense for the first quarter of 2007 was $119 million, a 19 percent increase compared to $100 million for
the same period of 2006.

Cash Flow Information
Free cash flow was $369 million for the first quarter of 2007 compared to $343 million for the same period of
2006. In addition to free cash flow, Yahoo! generated $72 million from the issuance of common stock as a
result of the exercise of employee stock options. This was offset by $595 million used for direct stock
repurchases, $250 million used in a structured stock repurchase transaction, and $12 million used for
acquisitions. Cash, cash equivalents and investments in marketable debt securities were $3,128 million at
March 31, 2007 as compared to $3,537 million at December 31, 2006, a decrease of $409 million.

Quarterly Conference Call
Yahoo! will host a conference call to discuss first quarter results at 5:00 p.m. Eastern Time today. A live webcast of the conference call, together with supplemental financial information, can be accessed through the Company's Investor Relations website at http://yhoo.client.shareholder.com/earnings.cfm. In addition, an archive of the webcast can be accessed through the same link. An audio replay of the call will be available
following the conference call by calling 888-286-8010 or 617-801-6888, reservation number: 80414581

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